Mining in the cloud vs simply buying bitcoin

[dustpine]

I think cloud mining in general is not profitable.

Here are my calculations for Mining Cloud vs Buying Bitcoin.

All following calculations are done on annual basis.

All following calculations are done WITHOUT halvings and adjustments counted until you read later down.

Hash rate (total hash power of the world) close to 49 Mil. Th/S as of today May 17, 2019.

Every hour gives the world 6 blocks, multiply that by x 24h x 365 days= 52,560 blocks produced in the world in 1 year.

Currently there are 12.5 bitcoin mined per each block x 52,560 blocks= 657,000 bitcoin can be mined per year in the world if no adjustments and halvings happened.

49 mil. Th : 657,000= about 75 TH/s to mine 1 bitcoin as it stands now, before counting adjustments and halvings.

Let’s assume I bought 1 bitcoin today and paid about $7,200 (as of May 17, 2019) in a hope to sell it in 1 year at a higher price.

Now let’s see what would happen if instead of buying 1 bitcoin I invested the same amount of money in cloud mining.

Typical contract from a firm like Genesis Mining offers 1TH at a rate of about $60 all-inclusive per year (May 17, 2019), and that's including maintenance and other fees.

For $7,200 I can buy about  120TH for 1 year term of cloud mining.

120Th : 75Th per 1 bitcoin= that should give us 1.6 bitcoin over 1 year period of contract for the price of $7,200.
 
1.6 bitcoin is obviously more then 1 bitcoin which I can buy today, so cloud mining is better, right?

I think NOT, because remember we have not counted difficulty adjustments and halvings yet.

Now let’s do that, let's include them in the picture.

The next halving is in about 1 year,  so we don’t have to take it into our example as the contract will be over by the time of halving, so for now we just have to worry about difficulty adjustments.

But from historic data I never seen those adjustments less then 100% year over year and usually it’s even more.

So, in our example instead of 1.6 bitcoin, I am lucky if I get 0.8 bitcoin by the end of cloud mining contract.

Therefore, in my humble opinion, it’s safer to buy bitcoin rather then mine one in the cloud.

Would you disagree? And if I am wrong where the flaw in the logic and/or calculation?

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[NeuroticFish]

So, in our example instead of 1.6 bitcoin, I am lucky if I get 0.8 bitcoin by the end of cloud mining contract.
Therefore, in my humble opinion, it’s safer to buy bitcoin rather then mine one in the cloud.
Would you disagree? And if I am wrong where the flaw in the logic and/or calculation?

You are right, luck is a huge factor in the equation.
The difficulty sometimes rise, sometimes drops; of course, overall it rises more than it drops. I didn't do the math, but I think that there's also a chance for profit. So instead of your max 0.8 BTC, there could be something like 0.5(?)-1.25(?) BTC range.
Your conclusion is, however, correct. It's not worth the risk. (And I'd not even insist on how many fake cloud mining companies are around, let's just keep the calculation on legit ones.)

[okala]

So, in our example instead of 1.6 bitcoin, I am lucky if I get 0.8 bitcoin by the end of cloud mining contract.
Therefore, in my humble opinion, it’s safer to buy bitcoin rather then mine one in the cloud.
Would you disagree? And if I am wrong where the flaw in the logic and/or calculation?

You are right, luck is a huge factor in the equation.
The difficulty sometimes rise, sometimes drops; of course, overall it rises more than it drops. I didn't do the math, but I think that there's also a chance for profit. So instead of your max 0.8 BTC, there could be something like 0.5(?)-1.25(?) BTC range.
Your conclusion is, however, correct. It's not worth the risk. (And I'd not even insist on how many fake cloud mining companies are around, let's just keep the calculation on legit ones.)

Cloud mining is no longer profiting and at that it not certain if you make a good profits involving in cloud mining but to me it better for one to get involved in trading rather then cloud mining because in trading you can calculate your risk but in cloud mining you are not in control.

[Adriano2010]

I tried cloud mining on past but i not get ROI, and i lose seomthing like 0.03 bitcoin from what i invest, is better buying if mining at home is not possible because of space, cost of equipment, cost of electricity and other factors.

[adzino]

Most of the cloud mining site that are available now are just pure scam. They are just HYIP or some other ponzie scam. If you ask them to show some proof that they are actually mining something or their mining rigs, they won't be able to do so or they might just show you some fake mining farm. Most of them are fake because cloud mining is no longer profitable and the just are running a ponzie scheme in the name of mining.
I would rather suggest you to buy bitcoin and just hold it.

[xvids]

It is better to buy Bitcoin than to join cloud mining as you can see most of it is a scam a ponzi or a HYIP disguised as a cloud mining company.
So it is much more safer to buy it rather than to try your luck at cloud mining sites.
And if you want to earn in crypto trading is the best way to do it .

[Oilacris]

So, in our example instead of 1.6 bitcoin, I am lucky if I get 0.8 bitcoin by the end of cloud mining contract.

Therefore, in my humble opinion, it’s safer to buy bitcoin rather then mine one in the cloud.

Would you disagree? And if I am wrong where the flaw in the logic and/or calculation?

This is why these cloud mining sites are slowly dying or simply don't get more cloud mining investors due to unprofitability.

Having a contract doesn't mean that you would end up on having profits more than on the amount you invested and most of
those people who had put up money ending up didn't able to get some roi and even way lesser on their capital.

So,basically I would just buy 1 BTC and wait for a year.It is way more convenient or not a hassle thing for you to think off.
Difficulty is always the biggest factor when talking about profitability on mining.

[The Sceptical Chymist]

I think cloud mining in general is not profitable.
<snip>
Therefore, in my humble opinion, it’s safer to buy bitcoin rather then mine one in the cloud.

I never tried cloud mining thanks to all the negative stuff I heard about it on this forum, and I don't really want to get scammed.  I'm not sure how profitable it is even if you're working with a legitimate cloud mining service, but it makes a lot more sense to me to use the money that you were going to give to the cloud mining operation and just buy bitcoin flat-out.  Given how volatile the market is, there's a decent chance to make money simply by using a buy-and-hold strategy, and you don't have to worry about what someone else is doing with your money.

And outside of bitcoin, there are plenty of PoS coins that you can stake to earn dividends/interest from.  They're definitely risky, but again, you're in control of where your money is and not some questionable cloud mining operation.

[diazepam666]

Cloud mining is not profitable and you can consider it as ponzi scheme nothing more than that. There are some newbie having idea that they can make money on cloud mining things but that is not true.
If you want to invest on cryptocurrencies that is always great options to put it on bitcoin and Ethereum.
Have these alone your choice to grow your funds.

[Ailmand]

I tried cloud mining before but it didn't work for me. I don't know if there's still a huge number of cloud miners nowadays where it isn't as profitable as before anymore. I would rather focus on buying and holding bitcoin than expecting a profit from cloud mining. It will just disappoint you.

[pushups44]

I have tried mining using a service provider and have found it to be a disappointment, because it is centralized and a company can come up with all kinds of reasons not to honor a contract. Perhaps they will go out of business and liquidate, leaving you with nothing or uncertain just as Mt.Gox customers were. Oftentimes you will not even make a profit for this risk. Thus, I lean toward buying bitcoin directly and holding it in your own wallet.

[playboy654]

It depends on how much investment do you have in your hands it decides that choice because if you have lots of money simply make a investment is profitable for you otherwise if you had their budget amount in your hand you need to split your investment into different parts and use it for different investment it is the right Idea also.

[traderethereum]

Yes, cloud mining now becomes useless because you are difficult to reach the first ROI, especially if bitcoin difficulty increase.
But I already reach my first ROI with Genesis Mining and Hashnest in the past
When you were mining bitcoin at home, you need to think about the electricity fee, and if you don't have big power to mining plus low-cost electricity fee, you will not get a profit too.
I feel it's better to buy bitcoin than mining in this situations, but if you can get a free electricity fee then it is worth to try but make sure you have at least 25 Th/s to start so you can get a nice reward daily.

[Oceat]

It depends on how much investment do you have in your hands it decides that choice because if you have lots of money simply make a investment is profitable for you otherwise if you had their budget amount in your hand you need to split your investment into different parts and use it for different investment it is the right Idea also.

It is still not enough if you do have the right capital/amount, you will get frustrated waiting for your investment while some who do buy before are getting their ROI back already while you are still in the dust of coins waiting for your investment to give you ROI.

[Altcoinrusher]

I think there are compelling reasons why cloud mining did not became so popular and of course one of them is that it only offers very limited profitability but if you would buy down BTC, then you could do some flippening or day trading some alt coins with it at times and earn profits along the way.

[yusupjatigumilar]

It's true, cloud mining is now different from when cloud mining first appeared, now cloud mining is dominated by scams, many of my friends are victims of cloud mining investments, fortunately I have not been interested in that, I also prefer to buy bitcoin from in mining either at home or in the cloud, if I do mining at home it will require a lot of costs such as electricity and internet and other maintenance costs, instead of getting a profit maybe I will only spend a lot of capital without satisfying results,

[BossMacko]

Its better to build your own rig to mine Bitcoin or buy Bitcoin to hold than do cloud mining. I don't trust them anymore since i got scammed before when i was still new to Bitcoin. At first that site is giving profit but then they suddenly run and i was nkt able to profit or even get my initial investment.

[uneng]

Cloud mining is well known by being unprofitable. Nowadays it's really out of fashion, as it was already unmasked years ago. Many people invested on it and regret a lot later, because they were unable to recover at least the amount they invested initially.
And when the cloud mining investment looks too good to be true, it's a hyip investment and doesn't involve any mining operation. It's much better to just buy bitcoins and hold. The right thing to do would be to build your own mining operation, as was said, but it doesn't worth for most investors, considering the machinery and electricity costs. Forget about it.

[lepbagong]

If the current cloud mining situation is running, is that also not profitable? Of course the investment spent is quite large, I think rather than not being implemented there is better to keep going and hope there will be an increase in the price of bitcoin in the future.
If you might just think about starting from the beginning cloud mining, it never hurts to count as well as possible so as not to lose.

[Janation]

Its better to build your own rig to mine Bitcoin or buy Bitcoin to hold than do cloud mining. I don't trust them anymore since i got scammed before when i was still new to Bitcoin. At first that site is giving profit but then they suddenly run and i was nkt able to profit or even get my initial investment.

Cloud mining is great but you need good internet.

I don't understand it but I think I will be investing my money into other things that do cloud mining. I mean I will be wasting my PCs life into something I don't know if I will get paid into or not. If you will be asking me, I still like buying a rig for Bitcoin mining and yes, that is expensive and I hope you should also consider that mining nowadays is not a walk in the park. As time progresses, mining gets harder and harder.